Bitcoin, Bonds, and the Rising Influence of Japan’s Yield Curve
Weston Nakamura, founder of Across The Spread and a prominent global markets analyst specializing in Asian markets, reveals a significant and evolving macroeconomic correlation. His analysis indicates a stronger relationship between Bitcoin (BTC) and long-term Japanese Government Bond (JGB) yields, specifically the 30-year yield, than its traditional correlation with U.S. equities such as the Nasdaq 100.
This novel observation highlights a divergence in BTC’s price movement from traditional risk assets. Instead, BTC’s price trajectory increasingly aligns with the surge in JGB yields, both reaching record highs recently. Nakamura points to key events in 2024 – the launch of U.S.-listed spot BTC ETFs and potential Trump re-election – as examples where BTC experienced temporary price spikes driven by narratives, only to revert to a pattern mirroring long-term JGB yield movements.
This correlation, Nakamura argues, is not merely a secondary effect of U.S. Treasury (UST) yields. It reflects Japan’s unique market dynamics. Supporting this, Nakamura cites comments from U.S. Treasury official Scott Bessent, who attributes the rise in UST yields not to domestic political factors but to global forces, explicitly mentioning Japan’s influence.
This suggests a potentially significant indirect influence of Japan on U.S. macroeconomic policy. If U.S. policy decisions are based on the 10-year Treasury yield, and that yield is itself influenced by Japanese bond markets, then Japan could be indirectly shaping U.S. policy. Nakamura’s analysis posits that JGBs have become central to the global financial system, impacting assets across the board, including cryptocurrencies, equities, foreign exchange, and gold.
Nakamura’s conclusion emphasizes the importance of monitoring Japan’s bond market. Often overlooked, this market is now believed to exert substantial influence on global cross-asset behavior. Investors across all asset classes are advised to pay close attention to developments in Japan’s bond market for a comprehensive understanding of global financial trends.
